Subrogation is an idea that's well-known in insurance and legal circles but rarely by the customers who hire them. Rather than leave it to the professionals, it is in your self-interest to know an overview of the process. The more information you have, the more likely relevant proceedings will work out favorably.
Any insurance policy you own is a promise that, if something bad occurs, the firm on the other end of the policy will make good in a timely fashion. If you get an injury while you're on the clock, for instance, your company's workers compensation insurance pays out for medical services. Employment lawyers handle the details; you just get fixed up.
But since ascertaining who is financially accountable for services or repairs is sometimes a heavily involved affair – and time spent waiting often adds to the damage to the policyholder – insurance companies in many cases decide to pay up front and figure out the blame afterward. They then need a way to get back the costs if, when there is time to look at all the facts, they weren't in charge of the payout.
For Example
You are in a traffic-light accident. Another car ran into yours. Police are called, you exchange insurance information, and you go on your way. You have comprehensive insurance and file a repair claim. Later it's determined that the other driver was at fault and her insurance should have paid for the repair of your auto. How does your company get its funds back?
How Does Subrogation Work?
This is where subrogation comes in. It is the process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Under ordinary circumstances, only you can sue for damages done to your self or property. But under subrogation law, your insurance company is considered to have some of your rights in exchange for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
How Does This Affect the Insured?
For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one who had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – to be precise, $1,000. If your insurer is lax about bringing subrogation cases to court, it might choose to recover its costs by increasing your premiums and call it a day. On the other hand, if it knows which cases it is owed and pursues them aggressively, it is acting both in its own interests and in yours. If all of the money is recovered, you will get your full deductible back. If it recovers half (for instance, in a case where you are found 50 percent to blame), you'll typically get $500 back, depending on the laws in your state.
In addition, if the total price of an accident is over your maximum coverage amount, you may have had to pay the difference, which can be extremely costly. If your insurance company or its property damage lawyers, such as workers comp attorney Marietta GA, successfully press a subrogation case, it will recover your expenses as well as its own.
All insurance companies are not created equal. When comparing, it's worth looking at the records of competing firms to find out whether they pursue winnable subrogation claims; if they resolve those claims without dragging their feet; if they keep their policyholders updated as the case goes on; and if they then process successfully won reimbursements immediately so that you can get your deductible back and move on with your life. If, instead, an insurer has a reputation of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.